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Robinhood lays off 23% of staff

wsj.com

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Re: Robinhood lays off 23% of staff

#181

Post by alecbz »

skrtskrt wrote: post #77
mgfist wrote: post #48

Earlier quoted context omitted.

All of this has already happened. Just look at the stocks of all the pandemic companies. Peleton, Teledoc, Zoom, Docusign and on and on. Pretty much all down 80%+ from their highs.

Any institution that invested in "home workout" stuff deserves to lose every dollar they put in, how could you not see that coming.

Would you say the same about working from home generally, which seems to have more staying power (even if we are seeing some return to office)?

It seems not-crazy to me that someone would have thought that WFH was going to stick around post-COVID and thus also make people want to keep being able to work out from home.

Re: Robinhood lays off 23% of staff

#182

Post by daenz »

enticingturtle wrote: post #46
yuan43 wrote: post #34

Why not cut pay across the board? I know this is not the cultural norm, but I am curious how long this norm can persist. Without the ability to cut pay, layoffs are the only option for companies burning cash and losing altitude. That locks pay increases at the same inflated point that the bubble supported but which reality does not. To go one step further, is there a single advanced economy in which pay cuts, rather…

Short answer: your best employees will leave

Exactly, why would a high performer want to subsidize the lower performers with their own salary? Just go somewhere that will continue to pay top market rate.

Re: Robinhood lays off 23% of staff

#183

Post by munk-a »

kaczordon wrote: post #123
munk-a wrote: post #44

Earlier quoted context omitted.

There are talks of "late stage capitalism" all over the place - I think CEO compensation is one of the biggest hallmarks of it. Capitalism is supposed to naturally reward value creation to incentivize further value creation - somehow we've found ourselves in a situation where folks on the bottom of the pyramid aren't going to get incentivized for efficient labour no matter how much value they create - while folks at…

Vlad created an app and created value for lots of people. People chose to give him money in the form of investment for his company. I’d say plenty of people are motivated to become founders and create value. Most people just aren’t good at it or prefer a comfy and safe life. Nothing wrong with that either but don’t expect the same payout as someone who worked harder than you.

This really just seems like more a comment on how you relatively value networking compared to skills acquisition. Being a technical worker instead of a manager isn't a flaw - I am happy to continue delivering technical product to my company and I definitely deliver significant value.

I don't disagree that starting a company comes with risks and a personal investment that warrants increased compensation - but right now CEOs in the US make an average of 670x their employees... that is extreme.

I think the modern world has come to view low level employees as replaceable and thus the compensation is more focused on market pricing instead of individual value creation - but with CEOs that 670x is usually justified with how important the decisions they are making are but founders and CEOs are just as replaceable as anyone else.

Re: Robinhood lays off 23% of staff

#184

Post by [deleted] »

cjrp wrote: post #43
paxys wrote: post #29

> As CEO, I approved and took responsibility for our ambitious staffing trajectory—this is on me Reminder that Vlad Tenev received $800M in compensation in 2021. In the same year the company made terrible bets on crypto and banking, took an irreversible reputation hit among its core user base because of the GME fiasco, had multiple user data breaches, was subject to several investigations and was fined hundreds of mi…

Taking responsibility would mean returning a significant portion of that compensation.

[deleted]

Re: Robinhood lays off 23% of staff

#185

Post by gnu8 »

NovemberWhiskey wrote: post #141
paxys wrote: post #29

> As CEO, I approved and took responsibility for our ambitious staffing trajectory—this is on me Reminder that Vlad Tenev received $800M in compensation in 2021. In the same year the company made terrible bets on crypto and banking, took an irreversible reputation hit among its core user base because of the GME fiasco, had multiple user data breaches, was subject to several investigations and was fined hundreds of mi…

Robinhood's executive compensation clawback policy just FYI: In March 2021, our board of directors adopted a clawback policy effective upon the closing of this offering. Under our clawback policy, our board of directors may recover incentive compensation from an executive officer in the event of (i) a restatement of our financial statements or a material error in the calculation of one or more performance-based measu…

I'm wondering how much of that language is common to all publicly traded companies and how often the clawback policy is actually activated. Maybe the board sees enforcing the clause to be detrimental because it would impair their ability to hire another CEO, or it would have a chilling effect on the performance of CEOs in general. The board members are all wealthy themselves so this isn't a decision that affects their lives in any material way, except for their likelihood of being appointed to other company boards in the future. They basically meet in a fancy conference room once every six weeks to eat an expensive lunch and play-act at running a company.

Re: Robinhood lays off 23% of staff

#186

Post by closewith »

systemvoltage wrote: post #140
munk-a wrote: post #71

Earlier quoted context omitted.

Investment comes with risk - that's why you can make money at it. I think it's fair to say if this business is struggling it'd be more equitable to share the excess compensation with rank and file employees that are being deprived of their livelihood but unfortunately they likely have no "right" to that compensation with how various employee contracts are structured. It's usually the case in situations like this that…

All these people had salaries in excess of $180k I presume + stock compensation. Sorry, but they do not fall in the category of people that were exploited. I firmly believe in at will employment. In this case, the CEO exploited the investors, whether it is VC firms, institutional or private investors by making an error in the judgement of hiring needs. Of course there is a risk in investment, but when CEO's make majo…

> All these people had salaries in excess of $180k I presume + stock compensation. Sorry, but they do not fall in the category of people that were exploited.

The gilded cage is freedom argument?

Re: Robinhood lays off 23% of staff

#187

Post by SergeAx »

jrochkind1 wrote: post #45
paxys wrote: post #29

> As CEO, I approved and took responsibility for our ambitious staffing trajectory—this is on me Reminder that Vlad Tenev received $800M in compensation in 2021. In the same year the company made terrible bets on crypto and banking, took an irreversible reputation hit among its core user base because of the GME fiasco, had multiple user data breaches, was subject to several investigations and was fined hundreds of mi…

I realize it's not something that happens, but I would say "taking responsibility" would mean taking, oh, I dunno, $50M of that $800M in compensation in 2021, and distributing it to those laid off? (How the hell is your life different with $750M instead of $800M anyway?)

What do you mean "how is your life different"? His yacht may not have a second helicopter pad, for example!

Re: Robinhood lays off 23% of staff

#188

Post by BeetleB »

jonas21 wrote: post #168
paxys wrote: post #29

> As CEO, I approved and took responsibility for our ambitious staffing trajectory—this is on me Reminder that Vlad Tenev received $800M in compensation in 2021. In the same year the company made terrible bets on crypto and banking, took an irreversible reputation hit among its core user base because of the GME fiasco, had multiple user data breaches, was subject to several investigations and was fined hundreds of mi…

Are you talking about the ~$800M in stock-based compensation described here [1]? Nearly all of that only vests if Robinhood stock hits price targets between $120 and $300 per share. The remainder requires a price of $50.75 to be sustained for 60 days. Since none of these goals have been met, Vlad has not received any of it. And unless the company turns around dramatically - it's currently around $9/share - it's likel…

Exactly - all these articles about CEO compensation are misleading.

Case in point: Intel's CEO's 2021 salary was reported as almost $180M. In reality, he got only about $10M. He hit literally none of the targets that would allow him to get the rest of the compensation (although in theory he has a few years to hit those targets).

Re: Robinhood lays off 23% of staff

#189

Post by quickthrower2 »

paxys wrote: post #29

> As CEO, I approved and took responsibility for our ambitious staffing trajectory—this is on me Reminder that Vlad Tenev received $800M in compensation in 2021. In the same year the company made terrible bets on crypto and banking, took an irreversible reputation hit among its core user base because of the GME fiasco, had multiple user data breaches, was subject to several investigations and was fined hundreds of mi…

An article I read on HN talked about the difference between being nice (saying something to appease someone) vs. kind (doing something that benefits another person).

It mentioned on the NYC Subway you will see a guy help with a mother's pram but not say a word. No small talk. No smile. They are kind but not nice.

Assuming the above definition, I would say this CEO is "nice" but not "kind".

Re: Robinhood lays off 23% of staff

#190

Post by [deleted] »

tmpz22 wrote: post #158
88913527 wrote: post #113

Earlier quoted context omitted.

It's probably not that simple. Most chief executives delegate the responsibility of hiring staff to others. Sure, the buck stops with the executive, but ultimately nobody can review every single operational decision at scale. Maybe they hired for a world where the pandemic didn't happen and the monetary supply didn't tighten, then the world changed.

The entire purpose of the C-suite is to stay on top of macro level stuff, and its the boards purpose to make sure the C-suite is doing it. They didn't do their job. And they got rich not doing it.

[deleted]
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